Thursday, June 20, 2013

Canada’s impending housing collapse not in sight

OTTAWA — Not so fast. The purported collapse of Canada’s housing market
does not appear to be in sight, and any correction down the road could
likely be a mild one.

Recent data have defied warnings from market watchers of an impending
plunge — caused mainly by the impact of tighter mortgage rules imposed
by the federal government last summer to slow the race by consumers for
record-low lending rates.

The latest figures show sales of existing homes strengthened for a
second month in May, up by a seasonally adjusted 3.6%, after declining
10% between July and March.

The Canadian Real Estate Association, in a report Monday, also said
home prices were up 3.7% in May from the same month a year earlier, to a
national average of $388,910.

For all of this year, CREA pegs the average price rise at 2.1%, to
$370,900, weaker but far removed from correction territory. And in 2014,
the average value is expected to rise 1.8% to $377,700, the
Ottawa-based industry group said.